M&M gains 2%; firm strengthens pact with Jio-bp for EV charging points

CARE Ratings reaffirmed ratings on the existing bank facilities of M&M with stable outlook.

Shares of Mahindra & Mahindra (M&M) were trading higher by 2.5 per cent at Rs 1,259.40 on the BSE in Wednesday’s intra-day trade after the company and Jio-bp announced strengthening of their existing partnership with Jio-bp setting up robust charging network for Mahindra’s upcoming e-SUVs launches.

Jio-bp is a fuels and mobility joint venture between Reliance Industries Limited (RIL) and bp. Last year, the companies had signed MoU for exploring the creation of EV products and services, alongside identifying synergies in low-carbon and conventional fuels. CLICK HERE FOR FULL REPORT

At 10:20 AM, M&M traded 1.4 per cent higher at Rs 1,245.90, as compared to 0.27 per cent rise in the S&P BSE Sensex. The stock of passenger cars & utility vehicles company had hit a record high of Rs 1,365.90 on September 9, 2022.

Meanwhile, CARE Ratings reaffirmed its ratings for existing bank facilities of M&M with stable outlook. The assigned ratings for the bank facilities of Mahindra & Mahindra (M&M) continues to factor strong market position and leadership in domestic tractor industry, Light Commercial Vehicles (LCV) segment and EV-three-wheeler segment, well diversified business profile and experienced management.

The ratings has also taken into consideration the robust financial risk profile driven by strong capital structure and debt coverage metrics, along with financial flexibility supported by large un-encumbered cash and liquid investments. CARE also notes that M&M holds investments in some of the listed group entities where the market value of investments is higher than book value thus providing additional financial flexibility, CARE Ratings said in its rationale.

M&M also has a pipeline of new models to be launched in the course of next couple of years. CARE Ratings believes that while new models launches will help the company boost volumes, over the long term, M&M would continue to be exposed to the intense competition in the auto sector.